Managed Service Contracting

[Mulder]

Hi,

I am working at a client (as a traditional "day rate" contractor), however they also use what they call a 'Managed Service'.

This is where they have 'contractors' (I may refer to them as permtractors) who are on a 23 month contract but on a much lower day rate, than the traditional contractors. I can see the attraction to nervous contractor newbies (they tend to have come from permie jobs), as the 23 month contract gives them some security (also seem to have a 1 month notice period from employer).

The employer sees getting resources in 'cheaply' but at least for this particularly client and in my experience it does seem to be a case of you get what you pay for. (After all the best resources have the confidence in themselves to go for the better day rates ).

However despite the disparity in quality the client still seems to like this 'Managed Service'.

The client distinguishes between us by labelling us as "Day Rate" or "Managed Service", and when being nice we both refer to ourselves as "contractors".

Just wondering if other people have come across such a resource model at their client sites and people's views on them?

[cojak]

Yes, it's just a cheap way of getting bums on seats. Fixed Rate Contracts are rubbish. I'm not surprised the client likes it, they're getting employees on the cheap.

Do not call people on these FTCs contractors because they are not. They are employees without the benefits (and protection) of employment.

[Mulder]

They aren't the typical (at least from I see advertised) of FTC, as in a salaried position for 6 or 12 months (or in this case 23 months). They have umbrellas or Ltd companies and get a lower day rate than 'normal' day raters.

But yes I am loathed to refer to them as contractors, hence my informal 'perm tractors' and the client does distinguish between us both. I guess its just when us day raters are being nice we grudgingly call them contractors, as they seem to prefer that term.

[cojak]

Managed Service Contracting

Of course they prefer it, as it obfuscates the truth. Don't encourage the delusion, you're doing these people no favours in the long run.

[BolshieBastard]

I seem to remember issues with Managed Service Companies when IR35 came in and being asked if you operated via a PSC or MSC. Accountants had to be careful over the services they offered to contractors via PSC's as it could mean the PSC became an MSC or smething.

I think if you operate via MSC you're banged to right IR35. I think Virgin Money are one company who operate a core of MSC contractors.

[northernladuk]

Hays used to deliver a set of these people to Barclays at one time. Have to say the quality of these people wasnt any worse than the normal contractors. Seemed to be made up of aix of contractors that had been on the bench quite awhile or ex permies that were probably going tango back permie.